Lennar and Dandelion Energy are bringing geothermal heating and cooling to homeowners in Colorado.
The companies announced a partnership that will integrate Dandelion’s geothermal heat pump systems into over 1,500 newly-built homes across 14 Lennar communities in Colorado over the next two years. Construction has already begun at the first community, Ken Caryl in Littleton, Colorado.
Dan Yates, CEO of Dandelion Energy, says the partnership with Lennar has been long in the making, with Dandelion installing geothermal systems in several Lennar model homes over the last couple years. Colorado’s many incentives for electrification—many specifically for geothermal—make the state an ideal location for the partnership.
“The production environment affords scale [and] consequently, much lower costs. We are putting in geothermal systems to Lennar’s homes at less than half the cost that what we would do in a conventional one-off retrofit environment,” Yates tells BUILDER.
Yates points to the supply chain advantages of large-scale community projects and the reduced mobilization costs of working in a production environment as key factors in Dandelion’s cost advantages. As a result, the single-family homes and townhomes built by Lennar will not be priced much higher than they would be with conventional gas furnaces and air conditioners.
“This project is really bringing geothermal to the mainstream. Through this project, geothermal is really getting a chance to be a mainstream solution,” Yates says.
For Yates, the scale of the project and price point of the homes being built are both significant milestones for the geothermal industry. Lennar is the highest volume builder in Colorado, meaning that over the next two years, a large percentage of new homes built in the state will feature geothermal systems. The pricing of these homes help to dispel the misconception that geothermal is only available to wealthy homeowners.
“We are putting geothermal into brand new homes and townhomes that start in the $400,000 range. This is no longer a product that is only available to a wealthy homeowner,” Yates says. “It’s going to be a real eye opener for a lot of folks to internalize that a builder with the reputation and the cost conscious profile of Lennar can introduce geothermal into that framework.”
Yates adds that, even in the early stages of the partnership, the builder community in Colorado is already showing increased interest in geothermal energy. This is encouraging news for both Dandelion Energy and other geothermal providers.
“I am excited because it is going to cause people to double click [and ask] what is going on here, maybe something has changed in the 15 years since I saw that one geothermal heat pump,” Yates says. “When we talk to a lot of builders, that has been their experience: ‘I tried that out 20 years ago.’ That’s when we can educate them about how much has changed.”
How Geothermal Is Being Deployed
For the Lennar communities in Colorado, Dandelion Energy is installing single systems for each home rather than installing a community loop. Yates explains that while shared system loops make sense when there is heterogeneous demand—such as for dorm rooms on university campuses—such an application does not suit a single-family community.
“What we have done is optimized the scaled model, where we do the same thing every time,” Yates says. “We’ve radically focused on a simple installation model. A key part of that is repeatability. We are doing the same thing in every single home where it can be rinse, wash, repeat. We don’t care about the distance between homes or about when we move from one street to the next.”
In the Lennar homes, Dandelion Energy installs the geothermal heat pumps in two phases. During the first phase, the exterior work—the drilling of boreholes—takes place after the site is brought to rough grade but construction begins on any individual home. In the second phase, the interior work occurs at the same time workers would conventionally install the furnace and air conditioner. Yates emphasizes that from a production standpoint, the geothermal installation has “no impact” on Lennar’s schedule.
Cost optimization will benefit not only the installer and home builder, but also by the homeowner. In addition to being priced at comparable levels to other new single-family homes, buyers will see further cost savings on energy bills. Yates says research suggests that switching from natural gas to geothermal heat pumps in Colorado reduces customer bills by approximately 17%.
What Is Next for Geothermal?
For Dandelion Energy, the Lennar partnership comes months after the company launched its geothermal heat pump nationwide and closed a $40 million Series C funding round. At that time, Yates said the company had plans to 5x the business in the next four years. With the Lennar partnership, Yates now says Dandelion Energy is “ahead of schedule” and is energized by even greater ambitions for what can be accomplished.
“What is so exciting to me about this partnership and the size of this project is it is a callout to the whole industry. The geothermal option is a real option and you should take a look at it,” says Yates. “This partnership is proof that geothermal can work, be affordable to a builder, and can make sense. Then you can offer your homeowner a better option.”
